Free Standing Emergency Room: Boom or Bust?

Healthcare has seen many trends on business models that either compliment or compete against the traditional hospital model.

It started with an explosion of ambulatory care centers all over the nation. This was soon followed by another boom with the development of urgent care centers in almost every city and town in the U.S. At that time there was a major controversy about these urgent care centers. The hospitals and primary care physicians were opposed because they feared these centers would steal patients. It later became clear that these centers were a complimentary addition to healthcare and filled a much gap in care.

Move forward to the last few years and now we have another trend in the making – the state-of-the-art free-standing emergency room. In several states these freestanding emergency rooms have been blossoming at a very rapid rate. And again, the hospitals and primary care physicians have started to voice concern. The reason is the same – they feel that these free-standing emergency rooms will steal their patients.

So what is the true story?

There is no doubt that free-standing emergency rooms are rapidly developing in Florida, Texas, and Minnesota. In just the past year, 179 centers have opened nationwide, with a majority in those three states. Most of these centers are elegant, offering a nice, modern environment with highly trained healthcare providers on board. The owners of these clinics claim they are filling in gaps in areas where there are no hospitals. Standalone emergency room operators claimed that their facilities relieve the congestion in the traditional hospital waiting rooms and provide quick access to healthcare.

The hospitals, not surprisingly, claim this is not the case as the majority of these free-standing EDs are located near shopping malls, plazas, and upscale neighborhoods. They also claim that these centers are siphoning insured patients from hospitals and primary care physicians. Very rarely does one find these ER centers in rural areas or rundown parts of the city.

These free standing ER centers see the routine patients with cuts, bumps, minor trauma, headaches, the common cold, etc. – the same clientele that visit to urgent care clinics – the chief difference is that these free-standing ERs are open 24/7. For patients, these new ERs offer easy access to healthcare, without the long commute. Plus, unlike the traditional hospital ERs, there is no need to wait hours before seeing a healthcare provider.

The one downside is that emergency services (EMS) will not divert patients to these centers. There is a strong belief that these ER centers are not well equipped to dealing with emergencies and have no admitting facilities – so it would be a waste of time for EMS to take a patient to such a facility. There is also a concern that some patients with serious medical problems may be driving themselves to these centers. These concerns, of course, are those voiced by the hospitals or those groups supporting hospitals.

In some states, free standing ERs have received approval for regular operations, but in states like California, centers are not permitted to operate. Most states are following the example set by California and trying to determine if these new ERs are needed, or if they are simply in the business to make a profit. Still considered a novelty by some, no one has examined the quality of care delivered at these facilities to see if they meet the standard of care.

Another major growing concern is that these ERs are not cheap. Anecdotal reports from patients claim that costs are extremely expensive and, at times, it may be more than the traditional hospital provided emergency room. Many healthcare experts feel that some patients may be lured by the gloss and shine of such centers, only to be laid with a heavy bill for trivial services.

While most insurance plans and Medicare do cover care provided by free-standing ERs, the cost to the patient is substantially more than a visit to a urgent care center or a primary care physician (much like a visit to the hospital’s ER).

The future of free-standing ERs is expanding, despite the complaints of hospitals and affiliated practitioners. We are in the era of consumerism, and more educated consumers are putting convenience as a top priority. Obamacare has now insured millions of new patients who never had coverage before, so there are more than enough patients to go around. Of course, reimbursement and profitability from the additional patients is another issue.

The only thing that will slow the growth of freestanding ERs is competition. If hospitals want to attract more patients to their ER, then they must create a better experience and facility. And – gasp – perhaps consider offering lower prices as a key differentiator.

David Chou

David Chou is a CIO, health IT thought leader, a “Top CIO to follow on Twitter," and keynote speaker. David is a regular contributor to Health Standards and frequently shares his views on health care technology in his Twitter feed.

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419onscene

Good article, with one caveat. EMS providers would love to utilize these facilities as alternative transport destinations, however are far more constrained than a belief they may not be appropriate. EMS is often greatly hampered by a reimbursement model that will only pay for transportation to a hospital.

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